CoalMin proposes escrow fund for underground coal gasification blocks

Stakeholders have 30 days to submit comments on draft rules mandating pilot feasibility studies, real-time groundwater tracking, and escrow funds for UCG mine closure

The coal ministry on Monday issued draft guidelines for preparation of mining and mine closure plans for underground coal and lignite gasification (UCG) blocks, mandating pilot feasibility study, real-time groundwater monitoring, and an escrow fund for mine closure.

 

The draft, which sets a regulatory framework for in-situ gasification of coal and lignite, invites stakeholder comments within 30 days.

 

The guidelines outline procedures for project feasibility, safety, environmental management, and post-mining rehabilitation.

 

Before starting operations, project proponents must conduct a pilot feasibility study through a reputed scientific or research institution.

 

Mining plans must include 3D hydrogeological models, one year of baseline groundwater data, and long-term simulations on contaminant movement.

 

Continuous groundwater monitoring using telemetry-enabled systems and online sensors is mandatory.

 

There is real-time data access for the Central and State Pollution Control Boards and the Central Ground Water Authority.

 

 

The draft mandates site-specific studies to predict and mitigate subsidence, underground fire, and groundwater contamination.

 

Each project must also have an emergency response plan detailing measures against hazards such as loss of hydraulic containment or unexpected land movement.

 

To ensure scientific mine closure, companies will be required to maintain an escrow account with the Coal Controller Organisation (CCO).

 

They have to deposit ₹50,000 per hectare as a base rate (September 2025), subject to revision every five years and escalation with the Wholesale Price Index.

 

Annual deposits must be made through the mine’s life, with penalties for delay and possible withdrawal of mining permission for default.

 

Up to 75 per cent of the fund can be reimbursed during progressive closure, with the balance released after final closure and three years of post-monitoring.

 

Closure plans must identify a zone of impact, address livelihood issues, and include community engagement and skill development measures.

 

The CCO will scrutinise and approve mining plans through a technical committee. The panel would comprise officials from the Ministry of Coal, Directorate General of Mines Safety (DGMS), Central Mine Planning and Design Institute Ltd (CMPDIL), and the Ministry of Petroleum and Natural Gas.

 

The committee is required to review plans within 15 days and issue final approvals within five working days.

 

The draft clarifies that these guidelines operate alongside the Mines and Minerals (Development and Regulation) Act, 1957, and related environmental and labour regulations.